Community Relations And The Implementation Of Chevron’S Global Memorandum Of Understanding (GMOU) In The Niger Delta

CHAPTER ONE

           INTRODUCTION

1.1       Background to the Study

Building local community relationships can be the most important communication activity undertaken by an organisation, yet it is often overlooked. It is a priority goal to develop a solid, ongoing and reliable community relations programme. It starts when an organisation becomes aware of its role in contributing to community welfare. It aims at bridging the communication gap between an organisation and its community.

In addressing this situation, Njoku (2000) sees community relations as a sphere of public relations which includes enlisting the cooperation and support of civic authorities and local citizens of the area in which the organisation is located. It is predicated on the recognition of the relationship between business and society and the conscious planning of corporate actions taking this into account.

Yet, Community Relations does not end when the company succeeds in fulfilling its obligations. It starts when the organisation becomes aware of its role in contributing to community welfare (Ezirim, 2001). Community Relations is a public relations function that aims at establishing and sustaining cordial relationship between an organization and its host communities. It is the act of engaging in goodwill building through good deeds. An example is the provision of essential amenities for communities. It refers to the various methods companies use to establish and maintain a mutually beneficial relationship with the communities in which they operate. The underlying principle of community relations is that when a company accepts its civic responsibility and takes an active interest in the well-being of its community, then it gains a number of long-term benefits in terms of community support, loyalty, and goodwill. Desatnik (2000) has noted that “Community involvement builds public image and employee morale, and fosters a sense of teamwork that is essential in long-term success” (Cincinnati Business Journal 2000).

A comprehensive, ongoing community relations programme can help virtually any organisation to achieve visibility as a good community citizen. Organisations are recognised as good community citizens when they support programmes that improve the quality of life in their community, including crime prevention, employment, environmental programmes, clean-up and beautification, recycling, and restoration. Some other examples of ongoing programmes might include scholarship awards, urban renewal projects, sponsorship of performing arts programmes, as well as social and educational programmes, children’s activities, support to community organizations, and construction projects (Gale Encyclopedia of small business 2011). On a more limited scale, small businesses might achieve community visibility and engender  goodwill by sponsoring local sports teams or other events. Support may be financial gifts or take the form of employee participation.

Good community relations programmes offer small businesses a wide variety of benefits. For instance, they give employees a reason to be proud of the company, which increases loyalty and may help to reduce labour and production costs.

Furthermore, a company with happy employees and a good reputation in the community is likely to attract highly qualified new employees. A small company might also generate new business through the contacts and leads it generates in its community relations activities. Such contacts might also make it easier for the company to obtain financing for expansion, find promising new locations, or gain favourable treatment in terms of taxes, ordinances, or utilities. Good community relations can also be beneficial in times of crisis, such as a fire or a plant closing, by rallying the community around the affected business.

The way and manner, in which an organisation and its activities are seen, noticed or perceived by members of her host community is central to the growth and peaceful operations of the organisation. Their impressions, understanding and feelings about the activities of the organization are key. Responsible corporate organizations strive to create a positive impression of themselves so as to enhance the perception of their host communities about their operations.

• Types of Community Relations Programmes

According to Soderberg in his book, Public Relations for the Entrepreneur and the Growing Business 1986, small businesses can become involved in their communities in a number of ways. Some recommended routes toward increasing community involvement include: taking an active interest in community problems; sponsoring youth activities; participating in local government; joining business and service groups; purchasing materials and supplies from local companies; encouraging community education and culture; making offices or other facilities available to community organizations; supporting local charity drives; and taking part in civic activities.

Soderberg (1986) discusses a number of specific programmes designed to increase a small business’ visibility and prestige within a community. For example, the company might volunteer to develop a civic programme, like a charity drive or auction. In addition, the small business owner, or a company representative, can give talks before the local chamber of commerce or civic association. The company can also invite community groups to tour its plant or offices, or can make its facilities available to such groups for meetings or events.

Alternatively,  the company could prepare an informational videotape about its products, services, employment policies, and overall mission and make these resources available to the community. Informational brochures and newsletters might also be distributed to civic and government leaders. Another way to improve community relations might be to beautify the company’s surroundings with a fountain, sculpture, or garden, so that it becomes a local landmark. Whichever types of community relations programmes are used, it is important to keep the media informed about the company’s activities.

Soderberg (1986, p. 243), stresses that for a business, community relations should involve more than just an annual contribution to the “United Way’’. Instead, the small business owner should become personally involved in the effort, and should encourage employees to participate as well.

A company’s employees should try to represent it well in all their interactions—from practicing good manners on the road while driving company vehicles, to treating customers and even visiting sales people with courtesy. In order to motivate employees to be good company representatives, small business owners should take whatever steps that are needed to boost morale. These might include maintaining an open-door policy, setting up a complaint box, or recognizing employees who are helping the community.

The practice of Corporate Social Responsibility (CSR), which refers to a business practice that involves participating in initiatives that benefit society, is very fundamental.

1.1.2    Nigeria’s Niger Delta

The Niger Delta refers to coastal areas (states) of southern Nigeria, covered by the delta of the River Niger, comprising of major linguistic groups, described in terms of Ijaw, Yoruba, Edo, Igbo, Ekid, Ibeno, Oro, Ibibio, Efik, Ogoni, Urhobo, Itsekiri, Ika Igbo etc. The region is blessed with abundant mineral resources, especially crude oil, which sustains over 90% of Nigeria’s economy.

The Niger Delta is home to more than 10 million people. It is usually equated with the oil-producing areas of Nigeria. It is made up of nine states. They are: Abia, Imo, Edo, Delta, Rivers, Bayelsa, Cross River, Akwa Ibom and Ondo.

One of the major seemingly intractable problems facing Nigeria is the continued abject poverty of citizens that live in the oil-producing region, the Niger Delta. Nigeria’s estimated natural gas reserve is about 176 trillion cubic feet, making the country a top ten naturally endowed gas producer in the world. Nigeria has earned about $30 billion dollars a year from oil in the last four years. However, it is estimated that only 1 percent of Nigeria’s population enjoy up to 80 percent of Nigeria’s oil industry revenues, through their political links and industrial dominance.

The juxtaposition between record level earnings in oil revenue in the last few years for Nigeria and the continued massive environmental degradation and abject poverty of individuals and families in the oil producing areas is a major source of concern to people of the oil producing areas and their international supporters.

The violence in the Niger Delta region despite draconian military operations, prior to the Federal Government’s Amnesty programme was another cause for concern. At the core of the restiveness and violence in the Niger Delta, was the role of major oil producing companies and their responsibilities to their host communities. This bone of contention between indigenes and oil companies is even stronger than a possible confrontation between indigenes and the local, state and national governments. For the people of the oil producing areas in Nigeria, the oil company is the government they can see and experience. The oil companies are not only the major employers of labour, but the fulcrum of community and social activities. Stark differences between the standard of living of oil company workers and the local population will always remain a sore point in oil company/local population relations.

The Niger Delta region, which produces most of Nigeria’s crude oil was for several years, a site for major confrontations between the people and government forces, resulting in extra-judicial executions, arbitrary detentions, and draconian restrictions on the rights to freedom of expression, association and assembly. It was clear, at this time, that the Government whose lifelime was being threatened by these conflicts had taken sides with the multinational companies against its citizens.

Although, the Federal Government’s Amnesty programme for militants in the region brought significant relaxation in the unprecedented violent confrontations that militancy inflicted on the economy, threats to oil facilities and explorations in the oil producing communities of the Niger Delta region remain unchecked. Unfortunately, youths in the region at some point, chose to take their destinies in their hands, and got involved in militancy and taking of hostages, murders, kidnapping and other acts of terrorism..

Multinational oil companies have operated in the Niger Delta region of Nigeria since 1956. Nigeria is a major producer of crude oil, the sixth largest in the world. The country is a prominent member of the Organization of Petroleum Exporting Countries (OPEC). By virtue of Nigeria’s position in the global market, the country sits conspicuously alongside other major producers like Saudi Arabia, Venezuela and Libya, among others, to dictate the tune and trend of world oil production and utilization. Nigeria today, holds the position of President of OPEC under Mrs. Diezani Allison Madueke. The country also held the same position in the past under Dr. Rilwanu Lukman. That is to say, that as at today, Nigeria presides and dictates the affairs of the rest of the oil producing nations in the cartel. With about 2.2 million barrels being produced per day, Nigeria is Africa’s biggest oil producer

Chevron in her Corporate Social Responsibility (CSR) publication produced in February, 2008 by the Communications, Policy, Government and Public Affairs Unit entitled: Global Memorandum of Understanding; a Strategic Partnership for development claims an economic, environmental and social performance where it describes how it strives to live up to its social responsibility. Despite these claims on the part of Chevron, there appears to be a deep-seated disdain and disenchantment by people of the Niger Delta over her Corporate Social Responsibility approach, despite the introduction of the Global Memorandum of Understanding as a Corporate Social Responsibility response.

1.1.3    Global Memorandum of Understanding (GMoU)

In 2003, the violent ethnic conflicts in the Western Niger Delta region led Chevron Nigeria Ltd (CNL) to evacuate six swamp facilities and stop operations in the area. These crises were as a result of hostilities between some Chevron Nigeria Limited host communities and non-host communities. The other communities considered the host communities as being privileged because of the development projects and cash compensations from CNL. At some point, the non-host communities attacked the host communities and destroyed some of the CNL-funded community projects.

Lack of transparency and accountability by community leaders and representatives led to suspicions by the people, intensifying conflict within the communities and with CNL. Worse still, the projects were not sustainable, being neither community-owned nor community-driven, as CNL used drove the community development processes, by determining the  needs of the communities and implementing projects that would meet the perceived needs.

In order to address these issues, improve on the relationship between CNL and the   communities and resume operations in the western Niger Delta, CNL designed a new community engagement model. The new model was expected to identify a framework within which CNL and the communities could work together to create a climate of understanding between the parties, so as to reduce conflict, promote transparency and accountability and encourage communities and their leadership to take ownership of their own development through active participation in the planning and implementation of sustainable development programmes. It was also expected to promote a sense of ‘stakeholder-ship’ in the business of the company, which would result in greater security for the communities and the company’s assets.

The new model, rather than designate some communities as hosts and others as non-hosts, deals with larger regional groupings, thereby creating a regional development model that was more inclusive. Due to the long history of mutual suspicion and distrust of the parties (CNL & Communities) for each other, it was apparent that the new engagement process may not succeed except there was a neutral body involved. CNL therefore interviewed about forty (40) NGOs, including the New Nigeria Foundation, in its quest for an appropriate NGO to assist it in facilitating the negotiation process and building the capacity of the Regional Development Councils (RDCs) to carry out their responsibilities under the Global Memorandum of Understanding (GMOU) model. After the selection procedure, NNF emerged as the NGO of choice.

CNL furnished NNF with its position on the issues to be negotiated. NNF requested the Council to come up with its own position on the issues in order for the negotiation process to take off. The negotiation was long and tedious.

The Foundation eventually succeeded in facilitating negotiations between the parties, and so, a document captioned ‘Global Memorandum of Understanding’ between Chevron Nigeria Limited and the Egbema and Gbaramatu Central Development Council of Delta state and the Delta State Government emerged from the process, and it was executed on Wednesday, 5th October, 2005 by the representatives of the parties to the agreement (CNL, EGCDC and State Government). That was the test case, before the same template was replicated in other areas.

1.2       Statement of the Problem

One of the major challenges that multinational oil companies working in various communities in Nigeria’s Niger Delta contend with is finding the right development and relationship management frameworks that will facilitate a conducive business environment and induce a collaborative disposition by stakeholders in general and host communities in particular.

This challenge is particularly marked in the case of Chevron Nigeria Limited’s GMoU with her host communities. While Chevron’s Global Memorandum of Understanding (GMoU)—a stakeholder engagement cum development framework, which was adopted in 2005. It is currently in operation in the Niger Delta region and appears to have disuniting effects on the host communities in the region. The GMoU is a community relations model which appears not to be working.

The problems associated with its implementation generally have been compounded by mixed reactions and seemingly unending conflicts over selective patronage and non-implementation of previous agreements. There is a growing perceived disquiet with the implementation of the GMoU, hindering its efficiency as a model of development.

Again, there appears to be an internal conflict among the members of the communities over the implementation, as many see the model as unsuitable. Other issues relating to employment and core human capital development remain unresolved; hence, many tend to see the GMoU as not addressing most of the age-long canvassed issues.

There is also anger that environmental issues that have to do with degradation from dredging, contamination and spills that frequently impact livelihoods are not incorporated in the scope of activities covered by the GMoU and to which Regional Development Councils (RDCs-local implementation committees) may not respond to.

It is assumed that the problem of the GMoU model ranges from its inability to address some age-long canvassed issues, perceived compromise, corruption and ‘politics’ in the implementation process. There are fears that failure of the GMoU may lead to renewed hostilities in the region, especially, in Chevron host communities; since the GMoU appears to be her only Corporate Social Responsibility response in the region. It is in line with this that this study sets out to examine Community Relations and the implementation of Chevron’s GMoU in the Niger Delta region. Thus, the question arises; to what extent has the Global Memorandum of Understanding (GMoU) served community relations purposes in the Niger Delta region?

1.3       Objectives of the Study

The objectives of the study are to:

1. Ascertain the community relations purposes of Chevron Nigeria Limited’s GMoU in the Niger Delta region
2. Determine the level of understanding of the GMoU by the host communities and other stakeholders.
3. Find out the level of participation of the host communities in the implementation of the GMoU.
4. Ascertain the projects executed by Chevron Nigeria Limited under the GMoU implementation.
5. Establish the effectiveness of the GMoU model in creating a conducive operational environment in the Niger Delta.
6. Ascertain possible misgivings by the host communities with the implementation of the GMoU by Chevron Nigeria Limited.
7. Find out the appropriateness of the GMoU implementation as a community relations strategy in sustaining the relative peace in the region.

The study sought to find answers to the following research questions:

1. What are the community relations purposes of Chevron Nigeria Limited’s GMoU in the Niger Delta?
2. What is the level of understanding of Chevron’s GMoU by her host communities?

• To what extent have Chevron’s host communities in the Niger Delta participated in the implementation of the GMoU?

1. What are the projects executed in the Niger Delta by Chevron Nigeria Limited under the GMoU?
2. What is the level of effectiveness of the GMoU implementation model in addressing the community issues and creating a conducive environment in the region?
3. What are the misgivings by the host communities with the implementation of the GMoU?

• How appropriate is the GMoU implementation as a community relations strategy in sustaining the relative peace in the Niger Delta?

 

The study tested the following hypotheses:

H₁:  The more effective Chevron’s GMoU is, the more peace the community enjoys.

H₂: The level of community involvement in the implementation of the GMoU determines the level of acceptance and success of the model.

 

• Significance of the study

This study is very significant in several ways. First, it is coming at a time when there is a national attention to prevent the return of the arms struggle that brought about wanton destruction and violence in the Niger Delta region in the past. The Niger Delta crises nearly crippled the nation’s economy; an experience that no responsible government will want repeated.

The study will contribute to how an effective memorandum model can be of benefit in sustaining the relative peace in the Niger Delta region. With an improved and effective memorandum model, the relationship between the host communities and the oil and gas companies will be cordial.

The findings will guide both the Company and the Community in the review of the GMoU, as is presently being advocated. This will go a long way in preventing the looming crisis and save lives and property in the area. Although, the company appears to have attained some of the objectives set by the framework, the study, through its findings, has suggested possible ways of sustaining the relative peace in the area.

Apart from making development interventions more participatory and therefore sustainable, it shall enable Chevron to receive and exploit guarantees of uninterrupted operations, and have a recourse to dialogue rather than confrontation anytime communities have grievances over its extractive activities.

To the government, it will contribute to the building and strengthening of democratic structures in Nigeria through effective community engagements which will bring about the much desired stability in the mineral exploration and exploitation business.

Theoretically, the findings support previous theories in the areas of Corporate Social Responsibility, Image restoration and even Stakeholders theories. The findings of this study, will create fertile grounds for future studies in community relations and general public relations programmes.

An effective community relations programme is essential for a conducive operational environment for corporate organizations.

This work is concerned with assessing community relations and the implementation of Chevron Nigeria Limited’s Global Memorandum of Understanding in the Niger Delta. It limited itself to studying Chevron’s GMoU in the Niger Delta region, specifically, Izombe (Jisike) in Imo State and Egbema/Gbaramatu and Itsekiri (Warri) in Delta state. The study is essentially a community relations audit of Chevron, with a focus and special attention on the GMoU implementation. The study did not go into other areas such as social audits and evaluation.

The major challenge that this study faced was with gaining access to Chevron Nigeria Limited Company’s offices. It was almost impossible to gain access into the CNL’s offices in Port Harcourt, Warri and Lagos due to heightened security tensions in the country.

Despite submitting a formal introductory letter from the Department, as well as a personal letter and follow-up visits to Chevron Corporate Offices in Lagos and Port Harcourt, it took pressure ‘from within and outside’ for the relevant persons to release information to the Researcher. Chevron rules also disallow giving out information, including telephone numbers without approval. Despite the limitations, the quality of data gathered addressed the research objectives and hypotheses.

On the part of the host communities, even when they were willing to respond to the questions, the mere mention of Chevron to them suggested an avenue for money making, probably, because of their deep distrust for CNL. Some of them actually demanded for money before filling in the respondent’s questionnaire. Also, for fear of possible betrayal, some of them were unwilling to divulge their feelings and action plans.

These challenges shot up the researcher’s budget, delayed the data gathering process and imposed additional financial burden on the researcher. Despite the limitations, the quality of data gathered addressed the research objectives and hypotheses.

 

 

• Operational Definition of Terms

Community Relations: This refers to planned programmes of Chevron intended to foster mutual trust, support and understanding between the company and its host communities.

Corporate Social Responsibility: Corporate social responsibility (CSR) refers to a business practice that involves participating in initiatives that benefit society.

Global Memorandum of Understanding: This refers to a stakeholder engagement cum development framework that attempts to put the community in the driving seat in matters relating to its infrastructural and human capital development; as introduced by Chevron Nigeria Limited.

Host Communities: This refers to towns and villages located within the Chevron operational areas in the Niger Delta region, specifically in Imo and Delta States.

Niger Delta: The Niger Delta region refers to areas (states) of southern Nigeria, covered by the delta of the River Niger, comprising of linguistic groups, described in terms of Ijaw, Yoruba, Edo, Igbo, Ekid, Ibeno, Oro, Ibibio, Efik, Ogoni, Urhobo, Itsekiri, Ika Igbo etc. The region is blessed with abundant mineral resources, especially crude oil, which sustains over 90% of Nigeria’s economy. The present day Niger Delta region is made up of 9 states, namely: Abia, Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Imo, Rivers and Ondo. The region is blessed with abundant mineral resources, especially petroleum, which sustains over 90% of the Nigeria’s economy.

Perception: This refers to the way and manner in which an organization and its activities are seen, noticed or perceived by members of her host community; that is, their impressions, attitude, understanding, and feelings about the activities of the organization-Chevron Nigeria Limited.

Regional Development Council: This refers to the local implementation groups/partners that handle the enforcement of the Global Memorandum of Understanding. It helps to develop and approve regional development plans, ensuring community participation and support for the overall programme, coordinates community employment and contracting with CNL, and assures security and safety of all personnel and property of the community and CNL.

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